Shore Bancshares, the parent company of Shore United Bank, has signed a definitive agreement to acquire Severn Bancorp in a deal worth around $146m.

The deal further bolsters Shore’s footprint in Maryland and increases its total assets to nearly $2.9bn on a pro forma basis as of 31 December 2020.

Transaction details

As agreed, Severn common stock holders will be entitled to receive 0.6207 shares of Shore common stock and $1.59 in cash for each Severn common stock share.

Additionally, four Severn directors will join the Shore Board.

Once complete, Existing Shore shareholders will hold around 59.6% interest in the combined firm, while the remaining stake will be with Severn shareholders.

The deal is expected to close in the third quarter of this year, subject to regulatory and shareholders’ approvals and other customary conditions.

About Severn Bancorp

Severn Bancorp is the holding company of Severn Savings Bank. Established in 1946, the community bank offers personal and commercial banking services as well as residential and commercial mortgage lending.

As of 31 December 2020, Severn had seven branches with nearly $952.6m in total assets.

Shore president and CEO Lloyd L. ‘Scott’ Beatty said: “The addition of Severn to our organisation is very exciting. We will now have a presence in Anne Arundel County which is a wonderful market and fills in a gap in our footprint. The merger also brings new products and talent to our organisation.”

Severn president and CEO Alan Hyatt said: “It is an opportunity for Severn to join forces with a larger organisation and remain committed to community banking.

“We look forward to the opportunities and benefits this combination will bring to our shareholders, in terms of prospects for future earnings growth, immediate dividend pick-up and diversification, as well as to clients, employees and the many communities we serve.”